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The UK’s financial regulator has published proposals to regulate many areas of the crypto market for the first time, including digital asset listing rules, restrictions on insider trading and capital requirements for the fast-growing sector.
The Financial Conduct Authority’s plans were published a day after the government introduced a bill for crypto-asset companies. They are designed to balance the UK’s desire to become a global digital asset hub with the aim of protecting consumers in the high-risk market.
In some areas, the FCA said it had diluted its plans compared to initial proposals published earlier this year. For example, it will no longer prohibit crypto-asset trading platforms from offering their own tokens on the markets they operate or from acting as prime brokers.
The regulator’s plans, detailed in three consultation papers published on Tuesday, aim to adapt its existing rules for traditional financial markets to the unique nature and specific risks of crypto-assets, such as Bitcoin.
The consultation is open until February 12, and UK regulations on cryptoassets are expected to be finalized later next year before being implemented in 2027.
“Regulation is coming – and we want to get it right,” said David Geale, executive director of payments and digital finance at the FCA. “Our goal is to have a regime that protects consumers, supports innovation and promotes trust.”
Britain has been criticized for what some in the industry see as an overly cautious approach to cryptoasset adoption, with Donald Trump’s US administration taking a much lighter approach.
But the FCA said it wanted a cryptoasset market “where innovation can thrive, but people understand the risks”. He added: “Regulation cannot – and should not – remove all risks. Instead, it should ensure that anyone investing in crypto does so with their eyes open.”
Cryptoasset companies will need to comply with existing capital requirements for Mifid investment companies as well as a new set of rules specific to the digital assets sector. They will also need a minimum amount of liquidity to enable them to “commence their liquidation without causing material harm”.
“Regulation will not be able to limit all risks in the crypto-asset sector,” the FCA said. “Anyone purchasing cryptoassets should be aware of the risks involved, including the risk of losing all the money they invest and the significant volatility in the value of cryptoassets.”
The regulator outlines rules for crypto brokers and intermediaries, measures to stop insider trading and market manipulation, as well as regulations for companies offering so-called staking services, in which a crypto asset is pledged in exchange for a reward. He said best execution rules that apply to traditional exchanges would not apply to cryptocurrency trading platforms.
The FCA has also sought to address the challenge of regulating “distributed finance” technology used by many cryptoassets, in which transactions are agreed directly between parties without any intermediaries. He proposes that “the same rules that apply to traditional finance also apply” to distributed finance.
Some areas of crypto regulation remain undecided. The FCA said it would consult in the first quarter of 2026 on whether the market should be covered by its consumer duties rules, which require firms to ensure customers get a good outcome, and whether their customers should be able to complain to the Financial Ombudsman Service.
